Solar Energy and Net Metering

Widespread solar adoption could help us reach our clean energy goals. The cost of solar has put it out of reach for some people, but several measures make it more affordable for consumers. Net metering is a viable solution.

Net metering is a process that allows consumers to sell unused solar energy back to the grid. It is available through many state governments. It can also be offered directly through utility companies.

How Does Net Metering Work?

Net metering provides credit for the energy solar energy system owners send back to the grid. It measures the difference between the power your solar panels produce and your power consumption. It credits consumers for the difference.

If you use more energy than your solar panels produce, you will draw against those credits. At the end of the cycle, you may receive a bill with a net credit or a balance. The credits are applied at the rate you pay for your electricity.

Different net metering programs offer various terms. Some allow credits to roll over indefinitely. Other programs will remove unused credits after 12 months.

Some programs will give you cash for your unused energy, others will provide credit. Some will offer credits at a flat rate. Some companies will offer varying credit amounts depending on when the energy is used.

What are the Different Types of Net Metering?

Traditional Net Metering

Traditional net metering is the most common arrangement. Consumers sell excess power to the utility provider in exchange for credits that offset expenses. The credit is applied at the retail rate.

Net Billing

Net billing allows utility companies to profit from the energy they generate. They will pay you a low wholesale rate for the excess energy you sell to the grid and charge you a higher rate for the power you use.

Consumers aren’t typically pleased with net billing models as they can cut compensation by 75%. However, advocates state that solar energy is not valuable to the grid in the middle of the day when most of it is received.

Net billing also increases reliance on batteries which store unused solar energy. They allow consumers to use their energy rather than send it back to the grid.

Buy All/ Sell All

This less common type of metering bills a solar array separately from home usage. Your solar production goes directly to the grid providing compensation in the form of bill credits. Your home energy is purchased from a utility company, just like non-solar consumers.

This method requires two meters, one that tracks your energy usage and another that tracks your solar generation. You will receive a bill or credit based on the difference between your use and generation.

Virtual Net Metering

Virtual net metering applies to electricity generated outside of where energy is consumed. The energy is fed into the grid providing net metering credits that are shared among subscribers.

You can purchase the energy generated by your share at a discounted rate.  You will typically receive credits for the energy on your electric bill. The bigger your share, the greater your credits will be. 

People who partake in virtual net metering will receive two energy bills, one from the community solar provider and one from your electricity provider for the traditional energy you use. However, you should see savings overall.

Am I Eligible for Net Metering?

Net metering is currently available in 38 states and Washington, D.C. It is mandatory in the following states:

• California

• Colorado

• Connecticut

• Delaware

• Hawaii

• Maine

• Minnesota

• New Hampshire

• New York

• Oregon

• Vermont

• Washington, D.C.

You may need a new meter installed at your home to get net metering. However, most homeowners have smart metering systems and will only require a tweak to their existing setup. Your installer should be familiar with net metering guidelines and will ensure your system meets eligibility requirements.

If net metering is available in your area, you should receive it automatically and get a credit on your next bill.  

Most utility companies require professional solar installation to connect systems to the local grid. Therefore, DIY solar projects are not eligible for net metering.

What are the Benefits of Net Metering?

Saves Consumers Money

Net metering saves consumers even more money on their electric bills helping offset the cost of solar installation. An Energy Sage report states you can save between 5% and 15% on your energy bill However, this will vary depending on how much energy you use and the net metering regulations in your state.

Approximately 20% to 40% of the energy produced from solar is sent back to the grid.

Supports Solar Adaption

Cost is a prohibitive factor in solar adoption. Net metering makes solar a more cost-effective option. It makes solar more accessible motivating people to make a switch that will help the world achieve its solar goals.

Rollover Credits Support Seasonal Needs

Consumers will see considerable net metering benefits during the summer when there’s plenty of sunlight. Rollover credits allow you to take advantage of the power produced during the summer in stormy winter months. It evens out energy savings to improve cash flow.

Reduces Pressure on the Grid

The electric grid has long provided power to communities, but today’s electric demands are placing additional pressure on the grid. The increased use of electronic devices is creating more demand than the grid can handle. This can lead to increased blackouts and long-lasting accessibility issues.

Net metering adds power to the grid so it can handle excess demand. It is especially useful during the summer when more electricity is used for air conditioning. The increased sunlight provides more power helping communities get through peak hours without disruption.

Reduces Transmission Costs

Solar systems produce energy at the point of use, so it doesn’t have to travel through power lines and substations. When excess energy is generated, the power company can purchase it, and sell it to another home without solar panels.

The utility company can also take advantage of the reduced need for power lines and substations for transmissions. It prevents energy loss during distribution and reduces costs and reliance on distribution systems.

More Control Over Your Electricity Bill

Net metering allows you to export solar power to the grid so you can reduce your electricity bills. You can also use batteries and savings strategies to increase your savings.

Increases Solar Jobs

Net metering accelerates growth in the solar industry creating jobs for installers, electricians, and manufacturers. Today’s solar industry employs over 260,000 American workers thanks in part to net metering policies.

How Can I Optimize Net Metering?

You can save more money with net metering by adding batteries or an EV charger to your system. You can use a battery to draw energy from the grid when it's cheapest and send it back when it's most expensive to optimize savings. You can also use electron counters to synchronize your energy usage with peak production times, so you don’t have to pay for energy from the grid.

Net Metering FAQs

Is Net Metering Only for Solar?

95% of net metering is tied to solar. Some wind power linked to agricultural applications can be tied to net metering, but solar is the focus.  

What is My Anniversary Month, and Can I Change It?

The anniversary month is when net metering is most beneficial to solar customers. It is typically March or April. The second page of your National Grid bill will provide a numerical value that tells you your anniversary month. For example, it will say 3 for March or 4 for April.

The anniversary month marks when your meter is read and billed. Your excess Kwh will be pulled off the account and converted to a dollar amount. The amount will be credited to your bill within 30 to 60 business days. You will see the dollar amount on the second or third page of your bill.

Consumers may choose to change their anniversary month if they feel it does not reflect the highest credit amount. They may also adjust it to the time before consumption begins to ramp up for the year to allow for the greatest use of credits. You may only change your anniversary month once.

You can change your anniversary month by emailing annivmonthchanges@nationalgrid.com. The email should state your account number, current anniversary month, and new desired anniversary month.

Can I Use My Solar Panels without Net Metering?

Yes, you can use your panels without net metering. However, you will only have access to what your system generates. Storage batteries can provide access to excess energy without net metering.

Solar America Makes Solar More Accessible

Price has been a major obstacle in solar adoption and reaching solar goals. Net metering increases savings to make solar more affordable. Solar America is also doing its part.  

Solar America allows consumers to enter their information and receive solar quotes from providers throughout the country. The competitive system ensures you will get cost-effective pricing. It makes it easy to find a contractor that meets your solar needs.

Submit your information to get quotes from local installers today.